More than 500 jobs were lost on Teesside today after MFI announced it was closing its Stockton factory.

Workers turning up for the early morning shift at MFI's Hygena factory were handed 90-day redundancy notices - hours before the company revealed it had plunged into the red to the tune of #600,000.

Union leaders said the news had come as a bolt out of the blue.

It is part of a cost-cutting plan by the company as it tries to turn around its ailing fortunes.

The group said it will reduce UK manufacturing by 40pc and close at least 11 stores, as well as shut three home delivery centres and its sofa workshop business.

The factory at Preston Farm makes bedroom and kitchen furniture and employs 533.

The announcement has outraged Allan Gray, regional officer for the Transport and General Workers Union, who had a meeting scheduled with the company for Thursday.

"That meeting was arranged two weeks ago," he said.

"But at 6am today the staff were handed redundancy notices, without prior notice to the T&G - and then an hour later it is announced to the City.

"Everyone is absolutely gutted. This is the third lot of redundancies in two years at this factory.

"We will be contacting local MPs to see if pressure can be brought on the company through the Department of Trade and Industry and we'll also be trying to persuade the company that Stockton is a viable operation."

It was only in December that MFI made assurances on the future of its Tees Valley jobs when it announced it was quitting three loss-making businesses.

At the time a spokesman said: "The closure of the non-core activities will have no effect on our manufacturing facilities in Stockton or our stores in the area."

Assurances were also made in October last year, following 87 redundancies, that no further job cuts would be made at Stockton.

New shift patterns were introduced at that time to help save jobs and Mr Gray said he was given an undertaking by MFI then that there would be no more cuts.

Today he said would be seeking urgent talks with MFI.

The company has not revealed which shops are closing.

One worker, who wished to remain anonymous, said: "The company is heavily outsourcing work to Italy and possibly China - 95pc of one single product was shipped for manufacture last Friday evening.

"Accountants have already been set in place to oversee the closure as part of the total restructuring of the group."

The former Hygena kitchen furniture factory has been in Stockton since the early 1980s.